India’s Nifty Futures Decline Before Wholesale Inflation Data

Indian (SENSEX) stock-index futures dropped before the release of wholesale-price inflation data.

SGX CNX Nifty Index futures for December delivery fell 0.1 percent to 6,188.0 at 10:11 a.m. in Singapore. The underlying CNX Nifty (NIFTY) Index on the National Stock Exchange of India Ltd. sank 1.1 percent to 6,168.40 on Dec. 13. The S&P BSE Sensex slid 1 percent to 20,715.58. The Bank of New York Mellon India ADR Index of U.S.-traded shares lost 0.1 percent to 1,114.64.

The Sensex retreated the most in a month last week after data showed the nation’s consumer-price inflation topped estimates. Most economists in a Bloomberg survey now expect Reserve Bank of India Governor Raghuram Rajan to increase the benchmark repurchase rate to 8 percent from 7.75 percent in a decision due Dec. 18. Wholesale-price inflation probably held unchanged at 7.0 percent from the month before, according to the median of analysts surveyed by Bloomberg.

“All eyes are on the wholesale price inflation now as that may determine whether the central bank will raise its borrowing costs or maintain the status quo,” Kishor Ostwal, managing director at CNI Research Ltd., said by phone yesterday. “Till then, we expect the markets to be in a wait-and-watch mode.”

Consumer prices rose 11.24 percent in November from a year earlier, data on Dec. 12 showed, compared with the 10 percent gain analysts had predicted.

Rajan has raised the main interest rate twice since he moved to the central bank in September to fight rising prices.

‘We are very uncomfortable with the current level of inflation,’’ Rajan told reporters in Kolkata on Dec. 12. “We are aware of the weak economy, but we also have to take into account inflationary pressures.”

Global investors bought a net $ 38.7 million of local shares on Dec. 12, taking this year’s inflows to $ 18.7 billion, the most in Asia after Japan, data from the market regulator show.

The Sensex has climbed 6.6 percent this year, the best performer among the four largest emerging markets, and trades at 13.5 times projected 12-month earnings, compared with the MSCI Emerging Markets Index’s 10.1 times.

To contact the reporter on this story: Rajhkumar K Shaaw in Mumbai at rshaaw@bloomberg.net

To contact the editor responsible for this story: Richard Frost at rfrost4@bloomberg.net